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Coca-Cola Enterprises Inc (NYSE:CCE)
Beneish M-Score
-2.52 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Coca-Cola Enterprises Inc has a M-score of -2.52 suggests that the company is not a manipulator.

CCE' s 10-Year Beneish M-Score Range
Min: -4.69   Max: -0.74
Current: -2.52

-4.69
-0.74

During the past 13 years, the highest Beneish M-Score of Coca-Cola Enterprises Inc was -0.74. The lowest was -4.69. And the median was -2.54.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Coca-Cola Enterprises Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0307+0.528 * 0.9801+0.404 * 0.9995+0.892 * 1.034+0.115 * 0.972
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9487+4.679 * -0.0149-0.327 * 1.0695
=-2.52

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,800 Mil.
Revenue was 2136 + 2333 + 1870 + 2032 = $8,371 Mil.
Gross Profit was 808 + 846 + 650 + 688 = $2,992 Mil.
Total Current Assets was $2,828 Mil.
Total Assets was $9,286 Mil.
Property, Plant and Equipment(Net PPE) was $2,167 Mil.
Depreciation, Depletion and Amortization(DDA) was $308 Mil.
Selling, General & Admin. Expense(SGA) was $1,951 Mil.
Total Current Liabilities was $2,847 Mil.
Long-Term Debt was $3,419 Mil.
Net Income was 238 + 198 + 115 + 135 = $686 Mil.
Non Operating Income was 0 + 1 + -1 + -3 = $-3 Mil.
Cash Flow from Operations was 378 + 146 + 67 + 236 = $827 Mil.
Accounts Receivable was $1,689 Mil.
Revenue was 2174 + 2156 + 1850 + 1916 = $8,096 Mil.
Gross Profit was 787 + 753 + 634 + 662 = $2,836 Mil.
Total Current Assets was $2,929 Mil.
Total Assets was $9,692 Mil.
Property, Plant and Equipment(Net PPE) was $2,282 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $1,989 Mil.
Total Current Liabilities was $2,794 Mil.
Long-Term Debt was $3,321 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1800 / 8371) / (1689 / 8096)
=0.21502807 / 0.20862154
=1.0307

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(846 / 8096) / (808 / 8371)
=0.35029644 / 0.35742444
=0.9801

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2828 + 2167) / 9286) / (1 - (2929 + 2282) / 9692)
=0.46209347 / 0.46234007
=0.9995

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=8371 / 8096
=1.034

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(314 / (314 + 2282)) / (308 / (308 + 2167))
=0.12095532 / 0.12444444
=0.972

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1951 / 8371) / (1989 / 8096)
=0.23306654 / 0.24567688
=0.9487

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((3419 + 2847) / 9286) / ((3321 + 2794) / 9692)
=0.67477924 / 0.63093273
=1.0695

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(686 - -3 - 827) / 9286
=-0.0149

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Coca-Cola Enterprises Inc has a M-score of -2.52 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Coca-Cola Enterprises Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03450.92831.09721.00390.99952.23270.83770.84581.06091.0386
GMI 1.01371.01151.02151.03561.033410.99871.00991.01681.0321
AQI 0.98780.99350.90651.00270.55341.53261.030.95251.0131.0386
SGI 1.04961.03041.05661.05721.04160.29881.03021.23380.97321.0186
DEPI 0.97710.97471.0460.96310.94661.11221.2180.84460.9981.0893
SGAI 1.02010.99390.98720.96370.99060.79641.01380.96921.01470.9698
LVGI 0.93650.97161.09610.94341.48960.38521.55371.12611.06861.0921
TATA -0.0387-0.04330.0077-0.0131-0.3847-0.0321-0.0233-0.0121-0.0287-0.0168
M-score -2.57-2.71-2.35-2.45-4.57-1.66-2.86-2.54-2.59-2.49

Coca-Cola Enterprises Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.95281.10091.06091.01840.99241.11581.03861.0421.22961.0307
GMI 1.01381.01291.01681.01771.02541.03161.03211.02341.00010.9801
AQI 0.98560.99761.0131.00621.01561.01211.03860.99340.96220.9995
SGI 1.04960.98220.97320.96820.98561.00711.01861.02341.05221.034
DEPI 0.86920.97850.9980.99361.03611.07941.08931.10661.10250.972
SGAI 0.96210.98671.01471.04581.02971.01440.96980.91930.93890.9487
LVGI 1.11791.08441.06861.14011.12591.13351.09211.0831.09211.0695
TATA -0.0136-0.0213-0.0285-0.0517-0.0278-0.0232-0.0168-0.0165-0.0157-0.0149
M-score -2.59-2.52-2.59-2.78-2.65-2.49-2.49-2.49-2.32-2.52
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